Central District of California Judge Cormac J. Carney has held that an antitrust plaintiff in a Section 2 case may not use evidence of lawful conduct to bolster claims that other allegedly predatory conduct constituted unlawful monopolization. Judge Carney certified the ruling for interlocutory appeal. The plaintiff, Arminak, a household products packaging company alleged that Calmar entered unlawful exclusive contracts with purchasers that restrained competition in the market for trigger sprayers that dispense liquid household products. The challenged agreements required the purchaser of a full line of Calmar products exclusively for periods at least three years. They also contained a right of first refusal, further hindering Calmar’s competitors in their ability to compete. Arminak further alleged that Calmar engaged in legal conduct that nonetheless helped provide anti-competitive intent. This conduct included (1) initiating low-cost pricing, (2) creating a “value group” division that produced a new trigger sprayer product intended to compete with Arminak offerings, (3)launching patent litigation against Arminak, (4) buying IP rights including trigger sprayer molds and production lines, and (5) entering deals designed to block Arminak from luring away its customers.
Judge Carney held that Arminak could not embue “sinister motives” to this lawful conduct. “It would be repugnant to the antitrust laws,” the judge explained, “to let Arminak present evidence of these five lawful categories of conduct to the jury to prove Calmar’s allegedly anti-competitive intent to acquire or maintain a monopoly. All of Calmar’s conduct was beneficial to competition. The antitrust laws were enacted to promote and protect Calmar’s conduct. Their purpose is certainly not to penalize it.” Arminak has stated its inten